RED amendment: What does it mean for biomethane?

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1 RED amendment: What does it mean for biomethane? Susanna Litmanen and Arthur Wellinger Development of Biomethane in Europe Legislation, Injection and Trade Paris,

2 Content iluc definition and EU legislation Existing biofuel Directives Biomethane s contribution to the EU targets Commission s new iluc - proposal Consequences of the proposal Next steps

3 What is indirect land use change (iluc)?

4 Legislative background on EU level In 2009 the EU set binding 2020 targets for transport fuels (RE share and GHG intensity) to fight climate change and to replace fossil fuels in the transport sector The Commission was asked on the same occasion to review the possible impact of iluc on GHG savings and, if necessary, propose ways to mitigate it

5 Existing biofuel Directives Renewable Energy Directive (RED): Share of renewable energy in all forms of transport in 2020 at least 10 % in each EU member state Fuel Quality Directive (FQD): GHG intensity of transport fuels reduced at least by 6 % by 2020 in each EU member state Minimum GHG savings (both directives) for accounting 35 % compared to fossil fuels 50% from % for new installations from 2018 default values and calculation method for actual values included (Annex V)

6 Article 19 (1) RED Existing biofuel Directives Defines the method for calculation, using the methodology given in Annex V.C. Typical and default values for GHG emissions for cultivation, transport and processing steps are given in Annex V.D & E Default GHG savings compared with fossil petrol/diesel Biogas* from municipal organic waste 73% Biogas* from wet manure 81% Biogas* from dry manure 82% Rapeseed biodiesel 38% Palm oil biodiesel (process not specified) 19% Palm oil biodiesel (CH4 capture at mill) 56% Sugar beet ethanol 52% Sugar cane ethanol 71%

7 Existing biofuel Directives Land Use Change component still to be added to calculation of GHG Impact (to be included in both Directives) On 17 October 2012, the Commission published a proposal to limit global land conversion for biofuel production. All cropbased biofuels will get a factor: cereals and other starch rich crops: 12 gco2eq/mj oil crops: 55 gco2eq/mj sugars: 13 gco2eq/mj

8 Biomethane s contribution to the EU targets Biomethane as a renewable fuel can replace/be blended with fossil natural gas in transport and in this way contribute to the GHG intensity reduction and to the share of RE in the transport sector Default GHG savings of biomethane compared with fossil petrol/diesel: 73%-82% (depending on the feedstock) Ethanol: 52-71%, biodiesel: 19-56% But: default values will be soon revised

9 Biomethane is efficient Source: Fachagentur Nachwachsende Rohstoffe e.v. (FNR)

10 Biomethane is efficient

11 Biomethane is a low in GHG emissions Emissions: Grammes of CO2 equivalent per km Source: Organic power

12 Commission s new ILUC - proposal The proposal from 17 October 2012 amends Directives 98/70/EC (FQD) and 2009/28/EC (RED) Unsure modeling results (different studies, different results) EC commissioner: Final text is an imperfect compromise proposal neither NGOs nor industry are happy Unsure future policies detrimental to investments: Commission review in 2017 on iluc science iluc factors may become mandatory now only a reporting matter Commission may (almost freely) change the methodology for iluc calculation and the feedstocks that count multiple times towards the target

13 Main amendments RED 2009/28/EC 2012 amendments Target (Article 3) The share of RE in transport at least 10% by 2020 The same 10% target but thereof only 5% from crop-based fuels Multiple counting (Article 21 in 2009; Article 3 in 2012) Fuels from waste/residues/ cellulosic material double counted towards the target Fuels from waste / residues quadruple counted; from cellulosic material double counted towards the target iluc factors (Article 19 in 2009; Article 22 in 2012) Requests the EC to review the impact of possible iluc MS to report to the EC every two years on the estimates for iluc emissions set out in Annex VIII Sustainability criteria (GHG savings from the use of biofuels) (Article 17) Existing installations: at least 35% until 1 Jan 2017 and after that 50%; new installations (operation start after 1/1/2017): 60% from 1 Jan 2018 Existing installations: 35% until 31 Dec 2017 and afer that 50%; new installations (operation start after 1/7/2014): immediate 60% savings Subsidies for biofuels (Recital 6) Encourages to support all decentralised RE technologies Only advanced biofuels should be supported post 2020

14 Main amendments FQD (Differences to RED in italic) 98/70/EC 2012 amendments Target (Article 7a) 6% reduction in the greenhouse gas intensity of transport fuels by 2020 No changes Multiple counting No multiple counting No multiple counting iluc factors (Article 7a) Sustainability criteria (GHG savings from the use of biofuels) (Article 7b) Requests the EC to develop a concrete methodology to minimise iluc emissions Existing installations: at least 35% until 1 Jan 2017 and after that 50%; new installations (operation start after 1/1/2017): 60% from 1 Jan 2018 Fuel suppliers to report yearly to a national authority on the estimates for iluc emissions set out in Annex V Existing installations: 35% until 31 Dec 2017 and afer that 50%; new installations (operation start after 1/7/2014): immediate 60% savings Subsidies for biofuels No mention No mention

15 Consequences of the RED amendment proposal Can the RED and especially the FQD targets be reached without crop-based biofuels? 6% reduction in GHG intensity of transport fuels while the amount of fossil fuels increases?? Effect on the biogas sector: Only biomethane used in transport the iluc factors may however be extended to the whole biomass sector (sustainability criteria for solid and gaseous biomass) Double standards for biomethane: transport vs. other uses Most of biomethane produced from advanced feedstocks: a competitive advantage over conventional biofuels?

16 Next steps ILUC debates have started within the Council and the European Parliament long legislative process expected within and between the EU institutions A first orientation debate of the Energy Council on the topic took place end of February Just a few snap shots of the debate: - Member States are strongly divided in their opinions. - Most of the states have a very critical view on the Commission s proposal, only France was rather positive - the 5% cap does not make difference between the fuels with different GHG emissions (SE, UK, BE, AT) - Yes for the cap: DK, DE, FR, FI, AT, SE (only for biodiesel) - No for the cap: UK, BE, PL, CZ, SK

17 Next steps EBA will look after the interests of the biogas industry in EU-Brussels Position paper Meetings with EU officials Common actions with other associations

18 Thank you for your attention!